Merging finances as a couple: The do’s and don’ts

Merging finances isn’t only reserved for marriage. Couples that live together might benefit too. But there’s a wrong and right way to do it. “Money can represent both power and security in relationships, making it a challenging, but necessary, issue for couples to navigate,” Zoe Coetzee, EliteSingles’ in-house psychologist told Bustle.

Seventy percent of women and 79 percent of men find fiscal responsibility in a partner appealing according to a survey by EliteSingles. This suggests money matters and love need to be mixed cautiously. Most modern couples now make financial decisions together, (thanks, feminism!) but they need to communicate to avoid broken hearts.

She supported him until he owed her $6,000…

DO decide how to merge money. Sarah, 30, told Bustle her past experience influenced her belief that women should always be financially independent. She supported a partner while they said they were looking for work. “After eight months… My partner owed me nearly 6K in rent, groceries, gas money, all sorts of stuff,” said Sarah

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How to merge your finances should be informed by each partner’s financial status, their comfort level, prior obligations (e.g. kids or debt), and beliefs regarding money. You and your honey can keep most finances separate and have one joint account, or have one person pay for everything or decide who is responsible for which bill.

They have “some” credit card debt — but is that really all?

DON’T start too early. How well do you really know someone at the beginning of a relationship? “An ex of mine had ‘some’ credit card debt,” Elaine, 32, told Bustle. “OK, NBD. But then I found out that was one of many of his financial issues.” These details might only emerge later in the relationship.

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Combining your funds makes more sense if you’ve been committed for a while, maybe even after they say “I do.” At that stage, couples (hopefully) have a sense of each other’s goals, wants, needs, debts, etc., and will know the best strategies for a financial merge. Don’t end up like the next couple!

Did he “forget” to tell you his ex is getting alimony?

DO trust your partner unless they give you a reason not too. Jenna, 29, told Bustle she left her partner once she found out he got demoted and was still paying alimony to his ex. “The work demotion omission, I could have gotten past,” said Jenna. “But the ex-wife and still paying her?! No thanks!”

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Figure out why if you don’t trust boo with money and discuss major issues first before you take a financial leap together. If you don’t trust your partner, there need to be legitimate red flags like compulsive spending, not being able to keep a job, and ignoring their mounting debt.

Survey says most couples don’t talk about money

DON’T ignore debt. So many couples don’t even talk about it, according to a 2018 survey by Policygenius. Many of 1,526 people surveyed said they don’t share basic financial information with their partner. Thirty-eight percent of them reported not knowing about their partner’s debt or assets. Secret debt only means one thing: PROBLEMS.

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Make a plan to wipe your debt clean. Your partner may even be able to help you pay it down! Every relationship is different, of course. Discuss if this is financially feasible for you both to attempt together and make sure your partner is comfortable with this. They might want to be paid back in the event you break up.

The love of her life couldn’t budget. Here’s what she did:

DO make a budget. “I want a boyfriend who’s a partner, not one who I have to teach how to budget, you know?” Carrie, 28, told Bustle. She broke up with the love of her life because he kept spending irresponsibly and couldn’t budget. Her heart was broken over his broken bank account.

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Following a budget of ensures you’re not overspending in one particular area. Especially during the initial merge, you might be in need of a guideline. As you go along until your next paycheck, you’ll know what you can and can’t afford. Make sure it’s not unrealistic though…

One in five Americans don’t tell their partner about big purchases

DON’T make a big surprise purchase. Unfortunately, this seems to be a common problem. CreditCards.com reported one in five Americans spend $500 or more and don’t tell their partner. It’s a good idea to check in with your partner if you want to buy something using your joint account.

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But there are some things to remember: Asking “permission” for every single purchase isn’t convenient either, of course. Consider a rule to check in with your significant other when buying $75 or over — or whatever amount you feel is reasonable and within your budget! Just set it and don’t forget it.

What happens when you take a “team” mindset to money?

DO work as a team. Setting aside time to review a budget once a month is a good idea, finance expert Andrea Woroch tells Bustle. “This is also a good time to bring up money issues that have been bothering you,” she says. “Like if your partner spent too much on entertainment or clothing this past month.”

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Drop the ego — people in a loving relationship should be equals, not competitors. Thinking as a team will help decide the best way to tackle problems as they arise and get you on the road to financial success. Next, we’ll tell you about how kids and money change relationships.

He was good with kids but not finances

DO think of the children. Carly’s boyfriend Jackson was great with her son, but she didn’t want to have another child with him. “Jackson was reliable in every single way other than his finances,” Carly told The Cut. “It was such a hard call.” She was afraid Jackson couldn’t provide for her kids.

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If co-parenting is important to you like it was for Carly, consider who’s responsible for what child-related expenses. Will only the biological parent pay for their tuition, food, healthcare, etc? Will you divvy up the childcare responsibilities, and if so, how? Again, communicating about these before the fact will remove the possibility for misunderstanding.

When he left he took the dog

DON’T neglect the “getting to know you” phase. Reddit user emmny tells a crazy tale of supporting a boyfriend even though he drunkenly broke into an office, and got arrested. “And then he decided to move back home…broke up with me, and less than a month later was dating a high school girl,” says emmny.

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Worst of all? He took the dog they got and trained together. True, maybe this behavior surprised emmny and came out of left field. However, if emmny’s ex was predisposed to incidents like this unbeknownst to her and they shared money, she could have found herself in lots of debt.

This next decision is sad but you have to make it

DO discuss the sad stuff… Planning your will and life care directives will help you both guide end of life decisions. VITAS recommends asking each other questions like: “Who do you want to make medical decisions for you if you are unconscious or are otherwise unable to speak or decide for yourself?”

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All of these things can be overwhelming at the moment but the proper pre-arrangements can alleviate these potential stresses. Yes, death is sad and scary but this is just another adult decision to take into account along with budgets and bills. You’ll feel better about the future after you make these decisions.

Instead of saving he bought model trains

DON’T skimp on savings. Bad things happen in life and you should be prepared for it. Reddit user thejoyfulnoise says her ex was a jerk and bad at saving. “He spent ridiculous amounts of cash on stupid stuff like his train modeling hobby, but then somehow blamed me for all of his failures instead of him,” she says.

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Save for a rainy day together by setting aside money for your savings account or create an emergency fund. It’s tempting to spend all your fat paycheck all at once on model trains (or whatever your hobby is) but it’s not going to be fun when you don’t have cash for important stuff.

Her boyfriend tried to control her spending

DO make a cohabiting plan. How will things be paid for? Gabby tells Financial Diet her partner was financially abusive in that he was controlling her spending. She says: “My last boyfriend tried to get us onto one credit card so I no longer had a way to charge when I wasn’t with him.”

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Cohabiting legalities are up for discussion too. There might be pitfalls you didn’t realize. Take this scenario for instance: Say you’ve titled your home “tenants in common.” If your partner dies (God forbid), their property goes to their heirs. You could end up sharing a home with your horrid mother-in-law…

They had different ideas about “building wealth”

DON’T forget about investments. Actual investments, not the kind Leah’s ex had. She told Financial Diet: “Everyone had cautioned me against his…outlook on ‘building wealth’ (as he would call it in a snarky voice), but for him, that translated into an extreme disdain for holding down any sort of job.”

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Whether or not you’re on the same page with your investment portfolios is probably not something many couples talk about. But if you do want to invest in stocks or bonds, consider your personal risk aversions. You might have different portfolios but any changes in them might potentially affect you both.

What happens if you break up?

DO have the uncomfortable “what if we break up…” talk. A broken heart and a broken bank account aren’t fun. Take this all too common scenario for instance: A survey on Rent.com said many couples end up rooming with each other for awhile post-breakup because they can’t find a new apartment right away.

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Plan what’ll happen to your apartment if you break up — who will move out and who will stay? If your partner has been paying all the bills while you focus on school, do they expect you to pay them back? Decide ahead of time, perhaps in a written agreement.

Impulse buying and having debt is natural but lying about it is worse. Don’t take on the mindset “what my spouse doesn’t know won’t hurt them.” They’re going to find out about your little gambling problem if you live together. Therapy might help if you need to get on the same page.

He wanted a VIP lifestyle and she didn’t

DO discuss financial priorities. Simone Paget wrote in the Sydney Morning Herald that her ex dumped her because he wanted someone to keep up with him financially. “He loved any experience that had the letters VIP attached to it, while I’m more of a taco truck kind of person,” Paget says.

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Be aware of what each of you considers important financially and what you want to save for. If you don’t share views, try a partial consolidation, hold off for now or don’t do it at all. If you and bae have vastly different goals, however, that might be a sign of future problems.

Are millennials killing the joint bank account?

DON’T be upset if a total merge isn’t possible. The Atlantic reports it’s been a trend for millennial couples, particularly low-income ones, to keep separate bank accounts. This has to do with millennial marriage trends in general — they get married later and cohabit before marriage.

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Don’t think that your partner’s aversion to merging every and all of their money with yours signals a lack of trust. Maybe they had a bad experience in a past relationship or maybe they just need to warm up to the idea. People are established in their relationship norms and less likely to change.

The amount in your emergency fund depends on one thing

DO plan for the worst. Unexpected expenditures do unfortunately occur from time to time. Robert Brokamp of Motley Fools suggests coming up with a fund depending on obligations. “I think the advice to have a six-month emergency fund is really for someone who has kids, a mortgage, a car payment,” he says.

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Having a game plan for if this does happen will make all the difference if you and your lovebug sink or swim. Think of alternatives if your wallet is thin, like borrowing money from a relative or possible side jobs. These aren’t ideal but anything is possible if you plan beforehand.

What happens if you’re anxious about shared finances?

DON’T say “yes” if you don’t mean it! Why agree to something you’re not down for? Peter tells Refinery29 he was anxious about shared finances. “I was probably over-anxious,” he says. “But we didn’t spend outside our means in the early days, and we both made a conscious effort to not fight over finances.”

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Communicate your wants and needs. If you don’t want to completely merge money, say so! You could negotiate to have one joint account and keep everything separate, for example. Any significant other that isn’t willing to compromise shouldn’t be any significant other of yours. Combining your money in stages isn’t too much to ask.

You need to start doing this NOW:

DO plan for retirement. You can start saving at any time even if you’re no spring chicken. Financial advisor Priya Malani tells Refinery29: “Saving for retirement when you’re young is much easier than when you’re older — each dollar counts a lot more.” Common ways are your work’s 401K or starting a Roth IRA.

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Even if you’re in your mere early 20s, people in long-term relationships should think of retirement. You’re in it for the long run, right? Then plan for it! If you end up getting hitched or already are, you want to make sure you and your honey will ease into your Golden Years.

Arguments happen when you don’t do this

DON’T forget about your shared goals. “Summer and Wendy don’t generally fight about money, but there is sometimes annoyance when deposits into the joint account don’t happen in a timely manner,” Refinery29 says about a couple sharing finances. If Summer or Wendy always forgets to deposit checks on time, serious problems could arise.

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Before a romance-induced money merge, discuss your financial goals with one another. Do you want to put a down payment on a house someday? Or are you just making sure your rent gets paid? Getting on the same page about long-term goals will help you design a custom fit budget.

She was a spender, he wasn’t. Here’s what happened:

DO rein in the spending and debt. LearnVest tells a tale of a boyfriend helping his girlfriend stop frivolous spending: “Victor, a fastidious planner and saver, helped Jessica craft a strategy for paying down her debt. The awkward discussion strained their relationship initially, but eventually had a big impact.”

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Studies have shown money to be a common cause of break-ups. So, don’t be another statistic. Pay your credit card in full every month. Pay the monthly minimum on your student loans. Pay all the bills that you are supposed to. Your sweetie pie (and your wallet) will thank you!

He treated money like it grew on trees

DON’T use your money with an unreliable partner. Kelly, 33, tells Bustle she broke up with an ex because he couldn’t manage money. “It is always challenging when one of you treats money like it’s growing on trees,” she says. See them getting fired constantly or job hopping? Talk to them!

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If there’s a reason, cut them some slack! Buuut if they can’t keep a job due to their own mistakes, proceed with caution. This person will drain your bank account dry! You don’t want to find yourself supporting someone that doesn’t want to contribute to your shared livelihood. You’re nobody’s doormat.

She and her partner stress over bills

DO track your spending. There’s another person to think of now! Maya, 47, tells LearnVest she and her partner watched their finances carefully: “Even if we stress over bills, we’re working together to try to reduce that, and we make a point of reminding each other that we are working together.”

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Sites like Mint, LearnVest, and Honey-Fi help you monitor your expenditures. They’ll give you insight on where you can cut the spending and save for your next vacation or a down payment on a house. If you’re a visual learner especially, it’s really helpful to have insight on where your budgeting can improve.

Are you contributing enough?

DON’T forget to contribute. “We like to treat each other and not keep an exact tab; but it is also important that we feel like we are both contributing,” Willow tells Refinery29 about her relationship. Everyone opts for different paying options, e.g. there are some couples that opt for the “one-partner-pays-for-everything” approach.

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They might be traditionalists or one partner might be focusing on caring for their children or be busy with school. All those reasons are totally OK and they shouldn’t be judged for it. However, if one party in the coupledom is physically and emotionally capable of working and contributing to the couple’s livelihood, they should.

Here’s when you should start the money talk:

DO communicate and be transparent. Any relationship therapist will tell you to communicate, communicate, communicate. Taylor Gutierrez told LearnVest that money should be in discussion while you’re dating, not after putting a ring on it: “You can’t walk into marriage thinking that’s the beginning of your conversation about money.”

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Communicate about your priorities, monetary beliefs, and financial merging process every step of the way. Hiding things because they’re hard to talk about doesn’t work. If you talk an issue through — even if you fight about it — you’ll eventually reach a resolution that works for both of you.

Are you a selfish person? Here’s why that’s bad…

DON’T put your needs over your partner’s. When it comes to merging money with your honey, negotiate a plan for doing so. You might not share all the same beliefs or wants, but listen to their needs and understand where they’re coming from. A budget made by both of you is likely to work for your shared lifestyle.

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Compromise is a part of being in a relationship. This may be difficult for those that are very set in their ways but absolutely necessary for love to last. No one wants to feel like you don’t care about them and their financial priorities. They want to feel heard and feel like you care about their needs and wants.

Take these steps:

DO combine in stages. Even if you like jumping straight into the water, slowly easing yourself into the pool of financial cohesion isn’t a bad idea. Maybe you start out with a joint account to pay for the apartment you share together. You can move onto working on paying back your debts together, investing together, and so forth.

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This is a great strategy for those that have trouble adapting to big changes. We get it, changes can be really scary! Some people need to take things slooooow. Slowly moving to combined finances helps you wrap your mind around thinking of your assets as “ours” instead of “mine” and “theirs.”